"The New Xbox Experience will require 128MB of free space," reads a Microsoft press release. "While we expect the majority of consumers to download the New Xbox Experience without a problem, a small percentage of Xbox 360 owners do not have enough memory to accommodate the update."
In its entry-level "Arcade" trim, the console comes with no permanent storage space whereas the higher-priced editions pack in hard drives with at least 20 GB--more than enough to fit the update.
"Microsoft will be offering storage solutions to the Xbox LIVE community," continues the press release. No further details are available at this time, but are expected to be made clear by the update's November 19 release.